Chicago Realtor Agrees to Acquire Canadian Developer for $2 Billion

May 8, 1987

CHICAGO (AP) _ JMB Realty Corp. has agreed to buy Canadian developer Cadillac Fairview Corp. for about 2.7 billion Canadian dollars or roughly $2 billion, the companies said in a joint statement Friday.

″We are pleased to have the opportunity to acquire this premier real estate development company,″ said Neil Bluhm, president of Chicago-based JMB.

If completed, the deal would be the biggest real estate transaction ever.

Closely-held JMB has agreed to pay 35 Canadian dollars a share for Toronto- based Cadillac Fairview, one of the biggest developers in North America.

Cadillac Fairview shareholders can receive cash or preference shares of JMB, or a combination of the two, said the joint statement released in Chicago.

Completion of the acquisition is subject to certain conditions including pending financing arrangements and the necessary approval of various regulatory agencies in both countries.

The companies expect to enter into a definitive agreement by early July and to complete the transaction by Aug. 31, 1987, the statement said. A deposit of 25 million Canadian dollars has been made by JMB.

JMB, one of the largest real-estate investment, management and development companies in the United States, has $16 billion in real-estate assets under management, the statement said.

Its other major real-estate corporate acquisitions include the JMB- Federated Shopping Center Developments, Urban Investment and Development Co. and Alcoa Properties. Its acqiusition of Arvida Corp. is pending.

Trading in Cadillac Fairview’s stock was halted Thursday on the Toronto Stock Exchange, with the price at 34.75 Canadian dollars, up 37 1/2 cents.

Cadillac owns offices, shopping malls and other projects in Canada and the United States. More than half its stock is owned by the Bronfman family of Montreal and Reichmann family of Toronto, although the Bronfmans disclosed earlier this week they intend to sell their stake.

The reported acquisition price is about double the $1.1 billion financing in 1985 of Rockefeller Center in New York, believed to be the largest real estate transaction to date.

Cadillac’s principal property is Eaton Centre, a complex of offices and retail stores in Toronto. The company also has office buildings, business parks and shopping malls in Calgary, Montreal and Vancouver in Canada, and in Los Angeles, Dallas, Atlanta, New Orleans and other areas.